FitzGerald wants performance-based sin tax plan

Cuyahoga County Executive Ed FitzGerald proposed that 20 percent of the funds raised through the sin tax extension be distributed to the three major sports teams based on their on-field success.
The extension of the countywide excise tax on tobacco and alcohol products, commonly referred as the sin tax, was passed by voters in May. The money raised through the tax will be used for stadium maintenance and upgrades to Progressive Field, Quicken Loans Arena and FirstEnergy Stadium. FitzGerald said the ball is now in the court of the county to determine how the funds are distributed.
FitzGerald, the Democratic nominee for governor, said that 80 percent of the projected $260 million raised through the tax will be guaranteed for the three major sports facilities. The other 20 percent, which is projected to be about $50 million over the life of the tax, will be reserved as a “performance bonus,” or as FitzGerald referred to it, a “win tax” bonus.
“What we are saying is maybe this system can be improved by being more open, yes, but also through adding competition into it,” he said.
The money from the 20 percent performance bonus would still have to go to capital improvements, just like the rest of the funds.
Exactly how success will be measured is yet to be determined, but FitzGerald said a “Fan Advisory Network” consisting of seven Cleveland sports fans residing in Cuyahoga County will be appointed by the executive to help establish a measurement for performance.
“We’re talking about an industry, by the way, that measures performance all the time,” he said. “Every contract they sign with the players has an escalation clause or they have penalty clauses in it. I’m confident that we can figure that out without a one-size-fits-all approach.”
Regardless of how the 20 percent ends up being distributed, the county executive is confident the teams will have enough money to cover the improvements they need.
FitzGerald said he also wants how the other 80 percent is distributed to be determined “strictly by a scoring criteria.”
“We do this on all kinds of projects,” he said. “The state does it, federal government does this in terms of grant programs. They’ll say, ‘If you’re going to submit a capital request, is it necessary, how does it compare with other stadiums or facilities or arenas in the league? How important it is. Are you submitting a realistic budget? Are you building on other improvements?’ There are lots of scoring criteria. I’m not worried about that at all. In some ways, that was already going on.”
He added that he doesn’t believe that giving each team a third of the funds is a viable option.
“To me that doesn’t make any sense,” he said. “Who’s to say that what the Browns stadium requires and Quicken Loans Arena and Progressive Field is all the same? These facilities are all of different ages and have different needs.”
FitzGerald said his administration has reached out to the teams and said that their response was “varied.”
“If somebody told you, ‘Would you like to compete for this money, or would you rather not?’ Most people are going to tell you, ‘I’d rather not compete.’ ”
The executive added he would let the teams speak for themselves on the issue.
“This is the beginning of a conversation and I’m sure they’ll be quite opinionated on how they should be available and if they should be evaluated,” he said.
Cuyahoga County still has to vote on the proposal.
The sin tax extension goes into effect in August 2015.